Berkshire Hathaway and Ikea could be a match made in heaven. Bloomberg’s Josh
Hamilton has a speculative story wondering which companies Warren
Buffett might be interested
in buying, now that values have come down a bit – and what should
appear near the bottom of the list but Ingvar Kamprad’s world-famous
furniture-and-meatballs retailer.
On the face of it, Ikea is perfect for Berkshire: profitable, popular, extremely
well-run, and with a global footprint. But it does occur to me that Buffett
is actually better as a minority investor in public companies than he is as
the owner of a controlling majority stake in businesses. Many of his best-performing
long-term bets, like Coca-Cola and Wal-Mart, were not companies he bought outright
– just companies he bought shares in.
General Re, and Buffett’s insurance companies more generally, were excellent
acquisitions, of course, since they came with billions of dollars in cash which
he could then invest. But when he buys whole companies, what does he end up
with? Generally a bunch of second-rate brands like Benjamin Moore and Nebraska
Furniture Mart. Even Netjets, which is a great business idea with a huge amount
of buzz and an excellent reputation, has been a disappointment in practice.
An Ikea acquisition could change all that, and give Berkshire Hathaway ownership
of one of the strongest brands in the world. And it would prove that Rupert
Murdoch isn’t the only billionaire capable of buying a world-famous
franchise from a family which has no real interest in selling it.
Problem is, there isn’t an Ikea in Nebraska. Yet.